President Trump imposes 46% tax, "blocking" Vietnamese goods from entering the US

Exporting goods to the US is expected to be very difficult. Photo: Q. DINH

According to Tuoi Tre Online , on the morning of April 3, when the US announced the reciprocal tax, negative concerns spread throughout businesses. Because when this tax is applied, not only Vietnamese goods exported to the US may be greatly affected, but it will also impact foreign direct investment (FDI) flows in the coming time.

Disadvantage because of being taxed much higher than competitors

Accordingly, the 46% tax rate effective from April 9 will have a significant impact. Mr. Nguyen Minh Duc, Legal Department (VCCI) calculated that if the export turnover from Vietnam to the US remains unchanged, 119 billion USD per year, our goods will have to pay about 54.74 billion USD in tax, equivalent to more than 10% of Vietnam's GDP.

Vietnam's tax rate is equivalent to that of some countries such as Cambodia, Laos, Sri Lanka, and China. However, this is considered a "worst case scenario" when the tax rate on Vietnamese goods is much higher than that of other countries.

Among them, there are countries that are competitors of Vietnam in the US market such as Thailand 36%, India 26%, Indonesia 32%, Malaysia 24%, Bangladesh 37%, Philippines 17%, Pakistan 29%...

“Thus, if we consider the correlation, Vietnamese goods will be subject to a tax about 10-20% higher than their main counterparts. The main items include electrical appliances, electronics, textiles, footwear, furniture…” - Mr. Duc analyzed.

Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association Pham Xuan Hong expressed his concern when he said that this morning he was discussing with association members and businesses and making further assessments to come up with a response plan.

“If this tax rate is applied, it will cause difficulties for Vietnamese textiles and garments because Vietnam’s import tax to the US is the highest, after Cambodia and Laos. Therefore, businesses are worried and continue to monitor the situation,” said Mr. Hong.

Meanwhile, Mr. Ngo Sy Hoai - Vice President and General Secretary of the Vietnam Timber and Forest Products Association expressed that this tax rate is "terrible" and hopes that Vietnam can negotiate. Because many previous comments, the expected tax rate is lower, but the number of 46% of wood enterprises will be very difficult.

According to Mr. Hoai, the wood industry is currently under investigation under Section 232 of the Trade Expansion Act of 1962. Therefore, it may not be subject to this tax in the immediate future, but it is also impossible to predict the possibility of a tax after the US investigation.

Therefore, to respond in the short term, businesses will find ways to push goods before the investigation and tax orders are issued to reduce damage and find ways to restructure operations to reduce damage.

"Blocking the door" for Vietnamese goods entering the US?

At the same time, Mr. Mac Quoc Anh, permanent vice president of the Hanoi Association of Small and Medium Enterprises, said that continuing to impose a reciprocal tax on Vietnam at 46% is a very worrying development, especially in the context of global trade facing many uncertainties.

According to Mr. Quoc Anh, the 46% tax rate is too high. This is a tax rate that almost "blocks the door" for Vietnamese goods, especially seriously affecting the export of key industries such as wood, steel, textiles, seafood, household appliances, etc.

This tax rate also greatly affects business confidence when they are passive, worried about legal risks and costs, affecting production - investment - market plans.

In particular, the 46% tax rate makes Vietnam lose its competitive advantage. Because Vietnam used to be considered a partner with good cost and quality; this tax rate makes Vietnamese goods lose competitiveness compared to rivals such as Mexico, India, and Thailand.

According to experts, Vietnam is an important link in the global supply chain, especially for multinational companies that produce in Vietnam for export to the US. The 46% tax could cause these companies to move production to other countries with lower taxes such as Indonesia, Malaysia or Thailand.

At the same time, high taxes could reduce Vietnam's attractiveness to foreign investors, especially in export industries such as electronics and machinery.

Source: https://baodaknong.vn/tong-thong-trump-danh-thue-46-chan-cua-hang-viet-vao-my-248161.html